Key Takeaways
- • Ontario Teachers' Pension Plan's public equities returned 15% in 2025 while its private equity portfolio posted its first loss since 2009, according to Bloomberg.
- • Caisse de dépôt et placement du Québec's stock portfolio gained 18% last year, versus a 2.3% return from its private equity portfolio.
- • Ontario Municipal Employees Retirement System's stock holdings returned 12% in 2025 as its buyout portfolio ended in the red.
- • Ontario Teachers' raised its public market exposure to 18% at end-2025, its highest level since 2020, and is warehousing capital in public markets after asset sales in its private portfolio.
- • Critics question whether the private-asset illiquidity premium has materialized, with former PSP Investments CIO Eduard van Gelderen saying "this is clearly not the case."
Summary
Public equities have become the main driver of returns for several of Canada's largest pension plans, according to Bloomberg, even as policymakers and industry voices continue to promote private assets and venture capital. Stock portfolios at at least four of the country's biggest pension funds drove overall returns over three consecutive years, while private equity struggled to recover from a prolonged deal drought.
The returns gap is stark. Ontario Teachers' Pension Plan, which oversees $279.4bn, reported public equity returns of 15% last year, while its private equity portfolio posted its first loss since 2009. Ontario Municipal Employees Retirement System's stock holdings returned 12% in 2025 as its buyout portfolio ended in the red. Caisse de dépôt et placement du Québec's equity portfolio gained 18%, compared with 2.3% from private equity.
Bloomberg attributes part of the shift to the post-2008 move by Canadian plans into private equity, infrastructure and real estate in search of higher returns. That allocation left them underexposed to a prolonged global equity rally just as private markets became crowded, expensive and difficult to exit. Higher borrowing costs since 2022 slowed dealmaking and curtailed cash distributions to investors. Bloomberg reported that the S&P 500 rose about 50% from the time the US Federal Reserve began raising rates just over four years ago.
Several plans are adjusting their asset mix. Ontario Teachers' increased public market exposure to 18%, its highest since 2020, while its private equity allocation shrank after asset sales and valuation markdowns. CEO Jo Taylor said the plan is warehousing capital in public markets until it finds opportunities on the private side. Healthcare of Ontario Pension Plan, which manages $132bn and has historically leaned toward public markets, added to stock exposure last year after seeing a buying opportunity during volatility triggered by US President Donald Trump's so-called Liberation Day tariffs.
Not all observers favor adding equity exposure. Sebastien Betermier, associate professor of finance at McGill University, cautioned that "valuations are high so there is a risk of investing in listed equities at the peak." Separately, Eduard van Gelderen, former chief investment officer of the Public Sector Pension Investment Board, wrote in an email cited by Bloomberg that "most allocators have relied on this idea that private markets would generate an illiquidity premium on top of the returns in public markets," but concluded that "this is clearly not the case."
The returns gap is stark. Ontario Teachers' Pension Plan, which oversees $279.4bn, reported public equity returns of 15% last year, while its private equity portfolio posted its first loss since 2009. Ontario Municipal Employees Retirement System's stock holdings returned 12% in 2025 as its buyout portfolio ended in the red. Caisse de dépôt et placement du Québec's equity portfolio gained 18%, compared with 2.3% from private equity.
Bloomberg attributes part of the shift to the post-2008 move by Canadian plans into private equity, infrastructure and real estate in search of higher returns. That allocation left them underexposed to a prolonged global equity rally just as private markets became crowded, expensive and difficult to exit. Higher borrowing costs since 2022 slowed dealmaking and curtailed cash distributions to investors. Bloomberg reported that the S&P 500 rose about 50% from the time the US Federal Reserve began raising rates just over four years ago.
Several plans are adjusting their asset mix. Ontario Teachers' increased public market exposure to 18%, its highest since 2020, while its private equity allocation shrank after asset sales and valuation markdowns. CEO Jo Taylor said the plan is warehousing capital in public markets until it finds opportunities on the private side. Healthcare of Ontario Pension Plan, which manages $132bn and has historically leaned toward public markets, added to stock exposure last year after seeing a buying opportunity during volatility triggered by US President Donald Trump's so-called Liberation Day tariffs.
Not all observers favor adding equity exposure. Sebastien Betermier, associate professor of finance at McGill University, cautioned that "valuations are high so there is a risk of investing in listed equities at the peak." Separately, Eduard van Gelderen, former chief investment officer of the Public Sector Pension Investment Board, wrote in an email cited by Bloomberg that "most allocators have relied on this idea that private markets would generate an illiquidity premium on top of the returns in public markets," but concluded that "this is clearly not the case."
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